The Phorm share price is continuing to fall, see inset, and is nearly half what it was 3 months ago.

Interestingly the trading sites that report on share price and company related news, e.g Yahoo, LSE, Interactive Investor, etc, report “key” information about the company, e.g new CEO appointed etc, but fail to report all the negative press about Phorm to those trading.

The EU commissioner for information society and media, Viviane Reding, has written a letter to the UK Government asking it to confirm is Phorm is in breach of EU data laws, and to respond by the end of August.

Sandvine (www.sandvine.com) is a company that provides technology for packet inspection of traffic as it passes through the users ISP – some may call it a “man in a middle attack”.

The technology they provide is clearly effective, as some of their reports and screenshots show.They are able to identifyn at the user level what sites, what protocols, and even how many VOIP calls are being made – for example they state:

” How many of your subscribers are using “free” VoIP applications like Skype

How many XBox Live subscribers are on your network

How much bandwidth each of the peer-to-peer file sharing protocols is consuming

Which subscribers are your “top-talkers” consuming the most bandwidth, and at what times of day

For the VOIP calls that many people regard as annonymous, they can provide the following information:

Call Stats

Average Call Duration

Average Calls per User

Number of Calls

Calls by Provider

Calls by Provider Matrix

Number of Minutes

Minutes by Provider

Minutes by Provider Matrix

Connection Stats

Connections

Users

Protocol Distribution

Bandwidth by Protocol

Below is a screen shot showing how easily this is reported using their technology:

Sandvine are not a government agency, and state that this monitoring is to ensure maximum efficiency of broadband. They even have a white paper called “Net neutrality or Wild West?” which may indicate which side of the fence they sit on.

Sandvine argue that:

“The current situation in broadband is fast becoming a classic example of what economists call the
“tragedy of the commons”. When too many owners are endowed with the privilege to use a given
resource, the resource is prone to overuse and eventual depletion or destruction.”

Sandvine argue that people using YouTube, P2P, or the like are taking up too much bandwidth, so it needs to be monitored and then controlled. However as each individual buys bandwidth at a given limit, be it 512K or 8mb then surely that is the limiting factor and if a user wants to use up all their own bandwidth, so the rest of the people on “their” network (for work or home users), can’t get email or the like – that is their responsibility. If a large corporate wants to block YouTube, or P2P on their internal network to speed up their network for their staff, that sounds very legitimate and is their decision. But should companies such as Sandvine be stating that they should interfere with “your” network, be it at home or a corporation, and decide which protocols you can use? Surely each user is paying for a service, and if the ISP can not provide the 512 you requested then they are at fault not the user?

The argument of “over subscription” is often used. The basic gist of this that a service will have more people sign up for it than use it at the same time. Two obvious examples of this are your local gym and planes:

Your local Fitness First or David Lloyd gym (for the UK readers) probably has around 1,000 members, but only 50 to 100 are there at anyone time. For the business to work it needs more people to sign up than it can handle at anyone time. At peak times, e.g at 5pm, there can be ques for treadmills and the like, and so they may be signs limiting people to 20 minutes or the like, at the time. But in general the system works. Planes have a similar problem, they often over book a flight as they expect some people will always miss a flight. But not always, and hence some people, rarely, get bumped off flights because they have over booked.

Sandvine’s (and presumably ISPs) view is that broadband is same, hence they can monitor, filter and block your traffic as much as they like. To a degree they are right but they are, of course, deliberately misleading.

Firstly the gym and the airplane both have over subscription models, but have widely different numbers of over subscribing, but its is still only a problem rarely. The gym may have 10 or 50 times as many subscribed at any time, but the model works. The plane is likely to have only 1 or 2, but the model works and fails only occasionally – and those bumped off normally get great perks. However ISPs appears to have 1,000s oversubscribing all the time – and their model doesn’t work – so they have to put on restrictions and not just a key hours – but all the time. If they are continually over subscribed, all the time, this must be bad managment. If a plane was always kicking people off flights, or a gym was packed at 7am, then you would fly or train with a different company. Why can’t the ISPs except that they have more subscribers than they allowed for, and the lack of infrastructure is their problem not the users?

Secondly, each user is limited through an “over subscription model” already – in two ways. The first is the users their bandwidth – a user buys a certain amount of bandwidth and then the contention ratio – which is bought through the level of service. For example if a user buys a BT line of 512K with a standard 50:1 ratio they have a limit to how much data they can use. Also, it could be argued that as they are effecting 50 other people then they should be limited on how much P2P they are using. But if you go the the BT Business broadband and get a 4:1 ratio and an 8mb line, does that mean that they will allow whatever data you want, and they will remove all the monitoring? .

What about an SDSL line, with a 1:1 contention ratio, where no other customer is using the same resource, where you are paying for a “first class” ticket – are they going to remove all the technology and monitoring systems that track who, what, and when you visit, call, or email somebody online? As we know this technology does not get switched off when you pay for a better service this means that either the argument is flawed and misleading or the service is flawed and misleading.

While the UK is normally leading the way in monitoring its own civillians, the US is now looking at monitoring internet activity.

Charter Communications an ISP are looking to work with the NebuAd. The aim is to track customers web browsing habits, what a user searches for and sites they visit.

“Charter Communications Inc (Charter), an ISP and the third largest cable operator in the US, plans to test a web-tracking program in four cities which will track its customers’ web browsing, including search terms and URLs visited, and use that information to provide targeted advertising.

To do this Charter is partnering with an online ad firm, NebuAD, which has developed a system to categorize user profiles using packet inspection and shared user profiles with third-party advertisers. Customers would be permitted to opt out by installing a browser cookie; however, the cookie must be installed on every computer in the customer’s home and re-installed if the cookie is deleted.

Concerns expressed are that the monitoring and analysis of customers’ web browsing may violate privacy laws, and, specifically, that the use of an opt-out mechanism may contravene the US Communications Act, section 631 of which requires cable operators to use opt-in consent when collecting and using its subscribers’ personal information and web-browsing habits.”

Phorm is some of the latest technology that is used to monitor internet activity. It tracks a users activity, the sites they view, and then builds up a profile of an individual. This is done for marketing purposes, so that the company can then send targeted adverts to the user.

While some users may want this service, it is not a choice. If a customers ISP has this service, then the users data will automatically be routed to Phorm and their web habits tracked and profiled.